Bitcoin (BTC) failed short-term bearish breakout and rebounded. This may be an indication that the current trend is not corrective and that the price has formed a minimum. The behavior of the currency in the coming days will be a decisive factor that will determine the further direction of the trend.
Weekly consolidation
At the end of the week from June 28 to July 5, Bitcoin (BTC) was unable to launch a significant move in any direction. Instead, the price traded in a range between $ 32,699 and $ 36,660. The market continues to stay above the long-term horizontal support of $ 32,600, forming several long lower wicks below it.
However, the technical indicators on the weekly chart remain bearish. The MACD is in the red, the RSI dropped below the 50 mark, and the Stochastic Oscillator has formed a bearish crossover.
Trading range BTC
On the daily chart, bitcoin has been trading within the range of $ 31,400 – $ 40,550 since May 19. The last level is also the Fibo level of 0.382 retracement and may coincide with the downward resistance line, depending on when they meet.
BTC bounced off the support area on June 22, formed an upward low on June 26, and has since moved northward.
However, the technical indicators are not yet giving bullish signals. The MACD signal line is in the red and the RSI is holding below 50, although both indicators are rising.
In addition, the Stochastic Oscillator is close to forming a bullish crossover (green circle).
Dpbutfandto INTFROM. Source: TradingView
BTC Wave Analysis
We can deal with two likely scenarios.
The bearish scenario assumes that Bitcoin is still in bearish momentum starting from the all-time high on April 14 at $ 64,895.
If this option is correct, then BTC may now be in sub-wave 2 (black) of wave 5 (orange).
The potential target for the formation of the bottom of this price move is the $ 19,800 area.
Bitcoin completed sub-wave 2 (red) yesterday near the 0.786 Fibo level of the $ 33,800 retracement. The price failed to reach the channel’s median line and fell instead.
Thus, for this scenario to remain in effect, BTC should make a bearish breakout from the channel in the near future in the process of a sharp decline.
An alternative bullish scenario suggests that Bitcoin rallies in the leading diagonal. In this case, BTC can reach highs in the area of ​​$ 37,500 and only after that begin to decline.
However, the rally will be part of wave A (orange) of the ABC corrective structure, which is an indication that a local low has already been formed.
The further direction of the trend will depend on whether Bitcoin makes a bearish breakout of the current support or rebounds from it.
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